EEOC Issues Formal Opinion on the Work Opportunity Tax Credit

The U.S. Equal Employment Opportunity Commission has released its first official opinion letter dated April 29, 2020, on the Federal Work Opportunity Tax Credit Form 8850. The letter confirms that employers can legally utilize the Work Opportunity Tax Credit without violating federal anti-discrimination laws.

The letter is a written interpretation or opinion of the Commission, approved by vote on April 29, 2020, consistent with Section 713 of Title VII and EEOC Regulations at 29 C.F.R. § 1601.93(a), and Section 7 of the ADEA and EEOC Regulations at 29 C.F.R. § 1626.20.

Per the EEOC: Our position has not changed (since 2009), and we continue to advise that proper employer use of Form 8850 would not violate the federal equal employment opportunity (EEO) laws, most prominently Title I of the Americans with Disabilities Act.

Questions four, and five of the WOTC Form 8850 Pre-Screening Notice and Certification Request for the Work Opportunity Credit refer to veterans with a “service-connected disability.”

4. Check here if you are a veteran entitled to compensation for a service-connected disability and you were discharged or released from active duty in the U.S. Armed Forces during the past year.

5. Check here if you are a veteran entitled to compensation for a service-connected disability and you were unemployed for a period or periods totaling at least 6 months during the past year.

The letter continues, age-related questions on Form 8850 do not violate the Age Discrimination in Employment Act (ADEA) because the ADEA does not prohibit employers from asking age-related questions. Moreover, although three of the nineteen targeted groups that benefit from the WOTC program are limited to individuals under 40 years of age, sixteen of the groups include older individuals. Because applicants who are hired to enable an employer to qualify for the WOTC tax credit include both individuals under age 40 and individuals 40 and over, without identifying whether the applicant falls into one of the relevant groups in which age plays a role, any hiring decision an employer makes based on the desire to obtain the WOTC tax credit is not based on age, but on the availability of the tax credit.

The EEOC voted 2-1 to release a formal public opinion during a Commission meeting on April 29th.

This is positive news for employers who have had concerns about taking advantage of the WOTC program.

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Commission Opinion Letter: Federal Work Opportunity Tax Credit Form 8850


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